Fiscal notes: Sales tax must grow faster to meet Combs’ mark

Update at 4:45 p.m.: A careful reader points out that there was a one month speed up of certain sales tax collections passed in 2011, as part of the smoke and mirrors used to close a huge budget shortfall. That goosed Combs’ original estimate of sales tax receipts for fiscal 2013 by about $270 million. When lawmakers earlier this year swept away the gimmicks and reversed the tax speed ups, they effectively lowered her sales tax forecast for this year by that same amount. So Combs can hit her estimate if this month’s sales tax haul is roughly as big as the one last August, $2.34 billion. The larger point remains, though: While leaders are squeezing more money for roads from a state windfall from the oil and gas drilling boom, and have left a BIG cushion in the rainy day fund, the sales tax numbers show just how tight things are in the state’s general-purpose revenue account. As usual, it’s pretty much all been spoken for — or encumbered, as the tax and finance folks like to say.

Original item at 12:30 p.m.: The state collected $2.2 billion in sales tax last month, an increase of 7.3 percent over July 2012 receipts, Comptroller Susan Combs said Wednesday.

That means consumers have to come on like gangbusters this month for fiscal 2013 collections to hit Combs’ predicted $26 billion.

Through the first 11 months of the fiscal year, sales tax revenues have climbed to just under $23.5 billion.

The August number needs to be $2.58 billion for full-year receipts to hit Combs’ estimate, which she revised in her two-year revenue estimate in January.

But that would require 10.2 percent growth over the amount collected last August. The last time year-over-year monthly sales tax growth was in double digits was last November.

No wonder, as we noted here on Monday, Combs has been reluctant to raise her revenue estimate, despite a surge of energy-production tax receipts. On Tuesday, her spokesman R.J. DeSilva all but said that we shouldn’t hold our breath in expectation there will be any “unencumbered” general-purpose state revenue left when fiscal 2013 ends on Aug. 31. That’s the day the state’s two-year budget cycle ends.

If there’s any such money left, the 1988 constitutional amendment that created the rainy day fund requires half to be transferred to the rainy day fund. But as DeSilva noted in an email, it’s been six years since there was unencumbered general revenue transferred to savings. The only other time was in fall 1991, he said. So the rainy day fund swells entirely with oil and natural gas severance tax money, which brings us to some bigger-picture remarks about state finances.

As you can see in a new chart the Legislative Budget Board has posted online here, there’s a reason lawmakers on Monday were able to leave town saying they’d provided an additional $1.2 billion a year of money for roads.

Earlier, they’d used an annual figure of about $900 million.

Last Wednesday, Combs boosted the expected new money for the rainy day fund to $2.4 billion in fiscal 2014. If voters approve a constitutional amendment on roads in November 2014, half of future rainy day fund revenue would go to roads, including the $1.2 billion to be swiped from fiscal 2014. The transfers always happen in November. Still, as the budget board’s chart shows, transportation’s not guaranteed a $1 billion-plus annual infusion of money in future years. For 2015, it’ll be more like $940 million.

But hey, it’s the best the boys and girls could do, given how they’ve tied their hands by refusing to raise taxes or fees, or spend more than about 40 percent of the rainy-day fund’s balance in any given legislative session.

Despite an expected $2 billion water draw down, the use of $1.75 billion to reverse an accounting trick on school payments’ timing and the future siphoning for roads, the board’s chart shows that the rainy day fund’s balance won’t dip below $6 billion over the next two years. By August 2015, the reserve will be $8.4 billion. Not exactly the Grecian fiscal formula that tea party types like to warn about…

Top Picks

Comments

To post a comment, log into your chosen social network and then add your comment below. Your comments are subject to our Terms of Service and the privacy policy and terms of service of your social network. If you do not want to comment with a social network, please consider writing a letter to the editor.

ArchivesAbout this blog

About this Blog

The blog for the Dallas Morning News politics team tracks Dallas Fort Worth area, Texas and national campaigns.